Fluor challenged by shortage of skilled labor amid US shale boom

Fluor has been a prime
beneficiary of the US shale oil and gas boom as the engineering
and construction group starts to build
out energy infrastructure, but like rivals, it faces the
challenge of navigating one big possible bottleneck: the
availability of skilled workers.

Big chemical companies plan an array of new and expanded facilities along the US Gulf Coast
to handle the surge in gas and liquids supply, and Irving,
Texas-based Fluor reckons its can use some "home-field
advantage" to avoid its projects being delayed by the
squeeze on craft labor such as electricians, welders and
riggers.

"We've seen a lack of willingness on the craft part to
travel more than one state away. I think we're going to see a
change in that," Fluor CEO David Thomas Seaton said on an
investor call last month. He also said he thinks craft labor
could be a "pinch point" for new projects.

"So we're going to have to be careful about craft labor, but
I don't see that being an Achilles' heel to the schedules
people are thinking about or cancel in any way the projects we
are focused on," he said.

The shale gas boom is touted by many economists as a
transformative event for the US economy, generating an $88
billion in infrastructure spending over the next decade,
according to Macquarie Group Ltd.

Fluor, which posted $27.6 billion in revenue last year,
estimates the need for 20,000 to 50,000 craft workers for construction of US oil and gas
projects over the next decade, depending on how many projects
move forward.

The aging workforce of US engineers is a well-known issue
for companies such as Boeing, but the shortage of craft workers
is less publicized. Craft workers are two of the top 10 most
difficult types of jobs for companies to fill, according to
temporary hiring specialist Manpower Inc.

Fluor is the prime contractor
for the new ethylene cracking plant being built for Dow
Chemical in Freeport, Texas. The project is already underway
and is expected to require 2,000 workers at its peak, with both
companies counting on first-mover advantage to avoid being
caught in a labor-shortage trap as rival plants seek regulatory
approval.

Fluor is beginning the Dow cracker project ahead of a potential rush in
petrochemical construction, said
Richard Meserole, the company's vice president of energy and
chemical construction.

He said this will help it attract workers and establish a
beachhead with the supply of labor. Fluor also has a network of
factories in the Philippines, Mexico and Canada that can allow
it to build modular components off-site and then assemble them
on site.

The company also works closely with local schools and
governments to recruit and train local labor rather than trying
to woo workers from around the US.

"Fluor, in particular, has a lot of initiatives set up with
local junior colleges for apprenticeships and training
programs," said Sameer Rathod, an analyst with Macquarie Bank.
"Being a large player lends itself to attracting more people.
Fluor is a name that everybody knows, maybe others don't have
that."

Fluor had almost 36,000 salaried staff and 8,601 craft and
hourly employees world-wide at the end of 2012. In North
America, it employs 5,000.

"We have a fairly well-established network of technical
colleges," Mr. Meserole said in an interview. "We take a large
portion of those who come out of high school and see construction as a long career."
Fluor lists more than a dozen universities on its website with
which it shares official partnerships, including specialty
training support and scholarships.

Crackers -- plants that break
natural gas into its component parts -- are popular projects
for contractors to chase because of the increase in gas volume
available and the continuing low cost of domestic gas feedstock. Crackers are the first
step in a long processing, storage and distribution chain, as
well as further production of other gas derivatives, much of
which remains to be built.

By establishing themselves early in the process, Fluor has said
it will position itself for major contracts as projects ramp up further down the
chain.

"Everything is sort of focused around crackers, of course,
because you need to build crackers first before you can build
downstream units," said Peter Oosterveer, president of Fluor's
energy and chemicals group, at a recent investor
conference.

"A lot of people get excited about the prospect of maybe as
much as 10 crackers, which have been on our radar screen... I'm
quite happy to say that I will be disappointed if we can't win
or at least have a share on 50% of those crackers," he
said.

Dow Jones Newswires

Have your say

All comments are subject to editorial review.
All fields are compulsory.

Any interest in a field Landman? I work with my husband and he has been a consulting Landman for over 20 years. I have been working in the industry for 7 years. Anyone out there that may have information on stable long term employment let me know. I'll send my resume.

simon ndungu07.25.2013

hi,am intrested to work in your company as a craft worker from kenya.thank you

Jose B07.22.2013

Hi, if they would need a Mechanical Engineer with pipe stress Analysis experience, i´m interested.

Sugan07.17.2013

Site Manager - 11 years experience

Hrand Avanessian07.10.2013

I used to work for FLUOR and one month ago I was demobilized. I called and talked to the Electrical Manager in LA area, but I was told that they don't have projects. I am a Electrical Engineer, MS EE, Senior Member of IEEE since 1999, PE in California and Nevada, with more than 30+ years of experience in oil, gas and petrochemical fields. So, call me if you need me (818) 524 9454. My email is: hitechera@gmail.com

Robert Brown07.08.2013

Fluor would not have so much trouble staffing these mega projects if their supervision on other projects knew how to manage and treat the craft workers. They have lost loyal hands over the years due to lack of good on-site management. I believe upper management may know this and are trying to correct the problem. We shall see in the next couple of years how well they corrected the problem.

domingo s pabalan07.04.2013

When will you gonna open this for Senior : Civil/ Structural Engineer, QC Engineer even. Through this position I'm inquiring to carry-out not only to the knowledge and experience in different oil and gas location in heavy infrastructure projects site based. Gladly to hear your kind favor in the future.

Goud Prasad07.03.2013

If they Need MAtireal Control Admin Specialist in Any Decipline. My expertized Matireal, Waste Management,

Fluor Corporate License07.03.2013

what schools are offering training for Fluor in Texas

Ronilo M Garcia07.03.2013

If they need Material controller in any decipline.my expertized both oil & gas,power plant,polymer,LNG materials.

Ernie G.07.02.2013

Do they need Piping Materials Specialist? I have both metallurgy and polymers experiences as well as Piping Materials.

Bossman07.01.2013

Sounds like JP, is a disgruntled union hand. Don't give on your career at McDonalds....it will teach you a craft skill that even your pappa will be proud of.

Donald Phillips BSChE, MEChE, & MBA06.29.2013

Need any Chemical Engineers?

JP06.28.2013

Well Well, Between the huge EPC firms and the huge petro/chem companies that worked very hard on breaking the unions for one reason or another. They were very proud of them selves for the accomplishment. This all took place thru 70s to late 90s. With their great accomplishment they forgot one thing to invest in the future. With no real trade schools left to support the boom what is left? Now all the players of industry are left with is McDonald's rejects who can just about screw to pieces of hose together or manage to screw in a light bulb. This little piece of history should be considered when looking at FEED and EPC schedules, everyone.

Dr.Mukesh Kumar06.28.2013

Being a Materials & Metallurgist having 22 years of experience, i will am willing to join Oil & Gas MNC as materials expert.

Gulshan Malhotra06.27.2013

Great news for the craft workers.

Christopher Odokonyero06.27.2013

I am a mechanical engineer with a post graduate qualification in project planning appraisal and financing. I have had a wealth of experience working for two multinational oil/gas companies (Chevron and Total) in Uganda. I would wish to join the industry at up stream level so as to acquire the requisite experience and skills in the sector. Please I request that you forward my interest to relevant companies )the likes of Fluur)who could be willing to engaged me in the trade. I would be grateful to hear from you.